Dan Carpenter: Denying coverage isn't 'cure' for Obamacare

Jun. 11, 2013

Written by

It’s a sad day indeed when school districts are complaining that health care reform will force them find new ways to continue denying that benefit to their lowest-paid employees.

This is not to dismiss the financial straits Hoosier public schools have been thrust into by legislatures and governors bent on siphoning tax dollars into private institutions. Yet there remain several troubling unanswered questions that reach far beyond the schools:

• Who knows what the actual impact will be of the Affordable Care Act’s provision that health insurance must be provided by employers of 50 or more full-timers starting next January?

• Who realizes that the U.S. House, while unable to repeal Obamacare, has withheld funding from educational outreach to employers waiting to know the impact?

• Why blame the ACA for reduction in benefits when employers have been cutting back, raising premiums and dropping health insurance altogether for years?

• How are taxpayers better off when wages and fringe benefits are so meager that employees qualify for food stamps, Medicaid, the Healthy Indiana Plan and other forms of welfare?

• When will this high-poverty state come to its senses and accept the federal government’s offer to expand Medicaid to 400,000 needy people and pick up the lion’s share of the tab?

Context, it’s called.

Some school districts in Indiana do provide health insurance to bus drivers, mechanics, custodians, cafeteria workers and classroom aides. Labor advocates insist creative ways can be found in many other cases, when there is a will. Is Obamacare, they ask, a threat or an excuse?

Yet there’s no getting around the larger predicament. The schools compete in a marketplace where low wages and avoidance of benefits through shortened hours are standard.

According to 2011 figures from the federal Bureau of Labor Statistics, 71 percent of the Indiana workforce was in occupations paying less than 200 percent of the poverty threshold; in other words, less than what is generally considered a living wage. Only Kentucky among neighboring states was worse. Furthermore, nearly one-quarter of Hoosier workers were earning below the poverty line, “leading” the region.

(Page 2 of 2)

The state and federal minimum wage is $7.25 an hour. The president wants it raised to $9. The House will have none of that. Meanwhile, the living wage for a family of four is variously estimated in the mid- to upper teens.

“You’ll see an announcement ‘We’re creating 800 jobs in this district.’ But if they’re all $8 an hour jobs, those folks are going to be on public assistance,” said Derek Thomas, senior policy analyst with the Indiana Institute for Working Families.

Unions, under constant siege in Indiana, help.

Dave Warrick, executive director of American Federation of State, County and Municipal Employees Council 62, says health insurance tends to be part of the package in school districts where AFSCME bargains, including Indianapolis Public Schools and Fort Wayne Community Schools.

He sympathizes with the educators, noting that “The public schools in large urban areas have had funding cuts the last two governors’ cycles. Money’s very tight.”

But he too questions the economics of leaving underpaid public employees to welfare or unpaid hospital care, costs that are passed along to those a few rungs above.

“It’s our taxes, obviously. The intent of Obama’s health care plan was to alleviate that problem.”

Is it the fault of the Affordable Care Act that many employers are scrambling to make sure the problem persists? There’s a loud chorus of simple answers, but it’s an essay question.